British American Tobacco Australia Services v Fairfax & Anor

CATCHWORDS : EVIDENCE - Subpoenas and Notices to Produce - setting aside - relevance - apparent relevance

Alister v The Queen (1984) 154 CLR 404 Brand v Digi-Tech (Australia) Limited (2001) NSWSC 425 CASES CITED : Commonwealth v John Fairfax & Sons Ltd (1980) 147 CLR 39 Hatton v Attorney General of the Commonwealth of Australia (2000) 158 FLR 31; 26 Fam LR 520 Portal Software Pty Limited v Bodsworth (2005) NSWSC 1115 Trade Practices Commission v Arnotts Ltd (No 2) (1989) 21 FCR 306

British American Tobacco Australia Services Limited (plaintiff 5611/06) PARTIES : British American Tobacco Australia Limited (plaintiff 5612/06) John Fairfax Publications Pty Ltd (first defendant) The Age Company Limited (second defendant)

5611/06 G Reynolds SC, M Wheelahan w R Hollo (P) T Blackburn SC w R Glasson (D) COUNSEL : A Dawson (D2 & for Mr Birnbauer, subpd party)

5612/06 A Meagher SC w M Jones (P) A Dawson (D2)

Corrs Chambers Westgarth (Plaintiff 5611/06) SOLICITORS : Baker & McKenzie (Plaintiff 5612/06) Banki Haddock Fiora (D1) Minter Ellison (D2)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION DUTY LIST

5611/06 British American Tobacco Australia Services Limited v John Fairfax Publications Limited & Anor

5612/06 British American Tobacco Australia v John Fairfax Publications Limited & Anor JUDGMENT (Ex tempore) 1 HIS HONOUR: In each of these proceedings, the first defendant John Fairfax Publications Pty Limited, on 7 November 2006, served a notice to produce on the respective plaintiff, British American Tobacco Australia Services Limited (which I shall call "BATAS") and British American Tobacco Australia Limited (which I shall call "BATA"), and issued a subpoena for production of documents addressed to the partners of the law firm Clayton Utz. Each notice to produce required production on 9 November 2006 of the following documents or things: 1. All Documents relating to the decision of the plaintiff to commence these proceedings, including Documents evidencing the reasons for the commencement of these proceedings

All Documents relating to or evidencing any consideration given by the plaintiff to the seeking of the same or similar relief as sought in these proceedings against the proprietor of "The Age" newspaper, including any Documents evidencing reasons for not seeking such relief

All documents relating to or evidencing any consideration given by the plaintiff to the taking of proceedings against Clayton Utz to compel that firm to protect the plaintiff's confidential or privileged information

All Documents relating to or evidencing Communications between the plaintiff and Clayton Utz, including any partner or employee of that firm, regarding any consideration as to whether Clayton Utz should join these proceedings or seek similar relief in its own proceedings

All Documents evidencing Communications between Clayton Utz and the plaintiff or its solicitors relating to any demand or request by the plaintiff or its solicitors for Clayton Utz to act to protect the plaintiff's privileged or confidential information

All Documents relating to or evidencing Communications in response to the Communications referred to in paragraph 5 above

All Documents relating to or evidencing Communications between Mallesons Stephen Jaques and the plaintiff or its solicitors following receipt by Mallesons Stephen Jaques of an email and/or fax sent by Marcus Priest of the Australian Financial Review to Dale Bryce of Mallesons Stephen Jaques on or about 31 October 2006 (note: the email and fax are the documents referred to in paragraphs 11 and 12 of the affidavit of Paul R McCann sworn 2 November 2006 in Equity Division proceedings 5611 of 2006).

All Documents relating to or evidencing a meeting in or about 21 January 1997 between Peter Hobday, MaryJane Crabtree and Meghan Cahill of Arthur Robinson & Hedderwicks, Tony Border and Mark Hemery of Mallesons Stephen Jaques and Richard Travers of Clayton Utz, at which meeting discovery tactics by Rothmans, Phillip Morris and Wills were discussed, as well as the document retention strategies of some or all of those entities (note: this is the meeting referred to in confidential Exhibit 2 to the affidavit of Paul R McCann sworn 2 November 2006 in Equity Division proceedings 5611 of 2006).

2 Each subpoena required production on 9 November 2006 of the same documents as are described in paragraphs 4, 5 and 6 of the notice to produce. By notices of motion filed in Court this morning and made returnable instanter, BATAS and BATA apply to have the subpoenas and the notices to produce set aside. The essential basis of their application is that the subpoenas and the notices are said to constitute an abuse of process, in that they call for production of documents which do not have apparent relevance to the issues in dispute in these proceedings.

3 In the substantive proceedings - and although BATA may put its case on a more limited basis than BATAS - the essence of the case of both plaintiffs appears to be that documents have come into the possession of the defendants which contain information that the defendants will, unless restrained, publish or disseminate, which information is confidential to the plaintiffs and/or is subject to legal professional privilege of the plaintiffs. The defendants, as well as presumably disputing that confidentiality or privilege is proved in the first instance, will apparently contend that the information in question pertains to an iniquity in which there is no confidence, and/or that the public interest in disclosure of the information exceeds and outweighs any private right to confidentiality.

4 Whether there is in Australia a public interest exception to the protection of confidential information is a matter of some controversy. While, as Mr Wheelahan has submitted, there are a number of decisions which might be taken as favouring the view that there is no such exception, at least in the broad sense in which it has been applied in some of the English cases, other Australian cases - including, for example, the observations of Mason J, as he then was, in Commonwealth v John Fairfax & Sons Ltd (Defence Papers case) (1980) 147 CLR 39 (at 57) - point in the opposite direction. I accept Mr Blackburn's submission that, on an application of this type, it would be entirely inappropriate to resolve that interesting and difficult question, and I should proceed, as I do, on the basis that there is an arguable issue at the final hearing as to whether there is a relevant public interest exception.

5 The absence of apparent relevance of the documents, production of which is called for by a subpoena or notice to produce, is a sufficient ground to set it, or part of it, aside [Trade Practices Commission v Arnotts Ltd (No 2) (1989) 21 FCR 306; Hatton v Attorney General of the Commonwealth of Australia (2000) 158 FLR 31; 26 Fam LR 520; Portal Software Pty Limited v Bodsworth (2005) NSWSC 1115, [20] - [22]]. In this context, the concept of "apparent relevance" was explained by Beaumont J in Arnotts in terms that the material in question had apparent relevance if it "could possibly throw light on the issues in the main case". Similarly, in Alister v The Queen (1984) 154 CLR 404, Gibbs CJ at 414 accepted the proposition that "a subpoena had a legitimate forensic purpose if it appeared to be 'on the cards' that the documents sought would materially assist the defence in a criminal proceeding". Accordingly, documents called for by a subpoena will not lack apparent relevance sufficient to justify the issue of the subpoena if they could possibly throw light on the issues in the substantive proceedings or if it appears to be on the cards that they will do so. In some respects, what is of apparent relevance in the context of a subpoena or notice to produce is wider than in the context of discovery, including because, in the case of a subpoena or notice to produce, unlike discovery, documents arguably capable of providing a legitimate basis for cross-examination on credit have sufficient relevance [Brand v Digi-Tech (Australia) Limited (2001) NSWSC 425 (Hunter J), [36]].

6 In this case, the documents called for can conveniently be dealt with in four categories.

7 The first comprises those called for by paragraphs 1, 2 and 3 of the notice to produce; in short, they are documents which relate to the internal decision-making process and reasoning of the plaintiffs in commencing the proceedings and constituting them as they have been constituted. The essence of what appears to be called for by those paragraphs are the reasons and reasoning process which has resulted in the institution of the proceedings and their constitution as they were originally constituted. As Mr Wheelahan, who argued the point for BATAS, submitted, essentially the question of whether confidential obligations attach to information is a matter for the Court to conclude objectively, and does not depend on the state of mind of the person who claims confidentiality; even less does it depend on the reason or reasons for which a party commences proceedings to protect that confidentiality. A document which is entitled to, or in respect of which a party is entitled to, confidentiality or privilege, remains protected, whether or not its publication and dissemination will occasion damage, and whether or not the consequences of its becoming public are viewed by the party entitled to privilege or confidentiality with fear or equanimity.

8 Mr Blackburn submitted that the documents called for by these three paragraphs might potentially show two things: first, that the plaintiff had no real concern about the documents in question, or at least some of them becoming public; and secondly that the proceedings were commenced to conceal an iniquity. So far as the first is concerned, the subjective views of each plaintiff as to the gravity of any of the documents in question becoming public does not inform a decision as to whether they are subject to obligations of confidentiality, or whether those obligations of confidentiality should be enforced. As to the second, even if the documents in question coincidentally contained a statement on behalf of a plaintiff to the effect that it was appreciated that something done by the plaintiff in the past was wrong, and that the proceedings were instituted to prevent information of that wrongdoing becoming public, it does not seem to me that statements of the plaintiff's reasons for instituting the proceedings could ultimately inform a decision as to whether the documents were entitled to confidentiality or not. Whether there was an iniquity in the past might itself well be relevant to that issue, but the plaintiff's private cogitations as to whether or not there was an iniquity are not.

9 The plaintiff's reasons for commencing the proceedings, at least in the absence of an allegation that there is a collateral abuse of process - an allegation which was disavowed in argument - are not relevant to a fact in issue in the proceedings and do not, I think, have the potential to throw light on an issue in the proceedings. It follows that, in my view, the documents, production of which is called for by paragraphs 1 to 3 of the notice, do not have apparent relevance.

10 The second category comprises the documents called for by paragraphs 4 to 6 of the notice, which pertain to communications with Clayton Utz about protection of confidentiality of the documents the subject of these proceedings, and are mirrored as paragraphs 1 to 3 in the subpoena.

11 Two such documents have already been annexed by BATAS to the affidavit on which it relied on the interlocutory application, for the purpose of supporting an inference that the documents the subject of the proceedings are subject to obligations of confidentiality. I think it can be said that it was conceded, in the course of argument, that other documents of the same character falling within paragraphs 5 and 6 of the notice to produce may provide relevant context for the two documents that BATAS has so far chosen to put in evidence, so that the objection was not pressed in respect of those two paragraphs, save as to a suggested time limitation. Although the objection was pressed in respect of paragraph 4, the subject matter of paragraph 4 is very closely linked to the subject matter of paragraph 5, and falls within the same plight.

12 It was submitted that the documents called for by paragraph 5 should be limited in time. I think the preferable way of dealing with the matter is, rather than imposing a time limitation as such, giving attention to the words "plaintiff's privileged or confidential information" at the end of paragraph 5, which I would construe as being limited to the privileged or confidential information described in the summons in the proceedings.

13 The third category is paragraph 7, which is concerned with communications between Mallesons and the plaintiffs, or their solicitors, following the receipt by Mallesons of an email from Mr Priest, which was arguably the trigger for the institution of the proceedings, and which raised a question as to the propriety of certain alleged conduct of the parties in the McCabe litigation.

14 There is an important difference between paragraphs 1 to 3 on the one hand, and paragraph 7 on the other, namely that whereas paragraphs 1 to 3 are defined essentially by reference to the reasoning process of the plaintiffs in instituting the proceedings, paragraph 7 is defined by reference to communications. It is "on the cards" - and that, of course, bears no connotation of probability - that a response to the Priest email might, theoretically, have included some sort of admission of the past misconduct to be relied on in these proceedings as the relevant iniquity. An admission of past misconduct in such communications might facilitate proof by the defendants of the iniquity which they apparently wish to assert in the proceedings. While, in the context of a claim for privilege properly so-called, an admission of past misconduct, if made in a privileged setting, would remain privileged, it is, I think, arguable that if made in a setting to which confidentiality but not privilege attaches, there is at least a potential argument that on balance the public interest in disclosure outweighs the private claim for confidentiality.

15 It follows that I do not think that paragraph 7 has been shown to lack apparent relevance in the relevant sense. An argument was advanced that it was too wide, in the sense that it called for all documents regarding communications between Mallesons and the plaintiff "following" receipt of the Priest email, regardless of subject matter or other connection. I would construe paragraph 7 as using the word "following" in a causative as well as a temporal sense.

16 Paragraph 8 calls for documents relating to a meeting said to have been held on or about 21 January 1997. [In the course of argument, it was indicated that this was in fact intended to refer to 30 April 1997].

17 The only objection to this paragraph related to the form in which the documents called for were described. It was suggested that production of documents in answer to that paragraph would involve an admission of matters contained in their description in the notice. I am not at all sure that that is so, but the problem is easily resolved by striking out of that paragraph of the subpoena the part to which objection is taken, which does not otherwise affect its efficacy.

18 I should observe that the question of privilege has not been argued on this application. It is plain that many of the documents called for by some of the paragraphs which survive, as well as by those which I will set aside, may call for documents which may be the subject of legitimate claims for legal professional privilege. Sometimes a claim for privilege can legitimately be argued on the first stage of the subpoena process, namely, on an application to set aside - particularly if it can be shown that all the documents called for by the subpoena, or part of it, must necessarily be the subject of a legitimate claim for privilege. That point has not been taken here, and it remains open to the parties subpoenaed to claim privilege in respect of any of the documents, production of which will be required by those parts of the subpoena which survive.

19 In each matter, I make the following orders:- 1. Order that paragraphs 1, 2 and 3 of the notice to produce dated 7 November 2006 be set aside. 2. Order that it will be sufficient compliance with paragraph 5 of the notice to produce for the plaintiff to produce the documents described therein on the basis that the words "the plaintiff's privileged or confidential information" refer only to the information the subject of the summons in these proceedings. 3. Order that the words "at which meeting discovery tactics by Rothman's, Phillip Morris and Wills were discussed as well as the document retention strategies of some or all of those entities" be struck out of paragraph 8 of the Notice to Produce. 4. Order that it will be sufficient compliance with paragraph 2 of the subpoena to Clayton Utz if Clayton Utz produce the documents called for in that paragraph, limited on the basis that the reference to "the plaintiffs' privileged or confidential information" is a reference to the plaintiffs' privileged or confidential information the subject of the summons in these proceedings. **********

05/12/2006 - Correction to date on front page - Paragraph(s) Cover page

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